West Coast Life Ins. Co. vs. Hurd.

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PHILIPPINEREPORTSANNOTATEDVOLUME027
[No. 8527. March 30, 1914.]

WEST COAST LIFE INSURANCE Co., plaintiff, vs. GEO.
N. HURD, Judge of Court of First Instance, defendant.
1. CORPORATIONS CRIMINAL PROSECUTIONS.There
is no provision in the law relating to practice and
procedure in criminal actions whereby a corporation, as
such, may be proceeded against criminally and brought
into court.
2. COURTS JURISDICTION AND POWERS.The courts
of the Philippine Islands have no powers except those
conferred by statute and those implied powers which are
necessary to make the express powers effective.
3. ID. ID.The courts of the Philippine Islands have no
common law jurisdiction, and, even if they have powers
derived from native sources which are not expressly or
impliedly conferred by statute, there is not included
among them that of creating a process and procedure by
which a corporation, as such, may be proceeded against in
a criminal action.
ORIGINAL ACTION in the Supreme Court. Prohibition.

The facts are stated in the opinion of the court.
Southworth, Hargis & Springer for plaintiff.
Haussermann, Cohn & Fisher for defendant.
MORELAND, J.:
This is an action for the issuance of a writ of prohibition
against the defendant "commanding the defendant to desist
or refrain from further proceedings in a criminal action
pending in that court."
The petitioner is a foreign lifeinsurance corporation,
duly organized under and by virtue of the laws of the State
of California, doing business regularly and legally in the
Philippine Islands pursuant to its laws.
On the 16th of December, 1912, the assistant
prosecuting
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PHILIPPINE REPORTS ANNOTATED

West Coast Life Ins. Co. vs. Hurd.
attorney of the city of Manila filed an information in a

criminal action in the Court of First Instance of that city
against the plaintiff, said corporation, and also against
John Northcott and Manuel C. Grey, charging said
corporation and said individuals with the crime of libel. On
the 17th day of December the defendant in his official
capacity as judge of the Court of First Instance signed and
issued a process directed to the plaintiff and the other
accused in said criminal action, which said process reads as
follows:
"UNITED STATES OF AMERICA,
"PHILIPPINE ISLANDS.
"ln the Court of First Instance of the Judicial District of Manila.
"THE UNITED STATES

"versus
"No. 9661.
"WEST COAST LIFE INSURANCE Co., JOHN
"Libel.
NORTHCOTT, AND MANUEL C. GREY. )
"To West Coast Life Insurance Co., John Northcott, and Manuel C.
Grey, Manila.
"SUMMONS.
"You are hereby summoned to appear before the Court of First
Instance of the city of Manila, P. I., on the 18th day of December,
1912, at the hour of 8 a. m., to answer the charge made against
you upon the information of F. H. Nesmith, assistant prosecuting
attorney of the city of Manila, for libel, as set forth in the said
information filed in this court on December 16, 1912, a copy of
which is hereto attached and herewith served upon you.
"Dated at the city of Manila, P. I., this 17th day of December,
1912.
(Sgd.) "GEO. N. HURD,
"Judge, Court of First Instance."
The information upon which said process was issued is as

follows:
403
VOL. 27, MARCH 30, 1914.

403
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[Heading omitted.]
"The undersigned accuses the West Coast Life Insurance

Company, John Northcott, and Manuel C. Grey of the crime of
libel, committed as follows:
"That on or about the 14th day of September, 1912, and
continuously thereafter up to and including the date of this
complaint, in the city of Manila, P. I., the said defendant West
Coast Life Insurance Company was and has been a foreign
corporation duly organized in the State of California, United
States of America, and registered and doing business in the
Philippine Islands that the said defendant John Northcott then
and there was and has been the general agent and manager for
the Philippine Islands of the said defendant corporation West
Coast Life Insurance Company, and the said defendant Manuel C.
Grey was and has been an agent and employee of the said
defendant corporation West Coast Life Insurance Company,
acting in the capacity of treasurer of the branch of the said
defendant corporation in the Philippine Islands that on or about
the said 14th day of September, 1912, and for some time
thereafter, to wit, during the months of September and October,
1912, in the city of Manila, P, I., the said defendants West Coast
Life Insurance Company, John Northcott, and Manuel C. Grey,
conspiring and confederating together, did then and there
willfully, unlawfully, and maliciously, and to the damage of the
Insular Life Insurance Company, a domestic corporation duly
organized, registered, and doing business in the Philippine
Islands, and with intent to cause such damage and to expose the
said Insular Life Insurance Company to public hatred, contempt,
and ridicule, compose and print, and cause to be printed a large
number of circulars, and, in numerous printings in the form of
said circulars, did publish and distribute, and cause to be
published and distributed, among other persons, to policy holders
and prospective policy holders of the said Insular Life Insurance
Company, among other things, a malicious defamation and libel
in the Spanish language, of the words and tenor following:
404
404

" 'First. For some time past various rumors are current to the
effect that the Insular Life Insurance Company is not in as good a
condition as it should be at the present time, and that really it is
in bad shape. Nevertheless, the investigations made by the
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representative of the "Bulletin" have failed fully to confirm these

rumors. It is known that the Insular Auditor has examined the
books of the company and has found that its capital has
diminished, and that by direction of the said official the company
has decided to double the amount of its capital, and also to pay its
reserve fund. All this is true.'
"That the said circulars, and the matters therein contained
hereinbefore set forth in this information, tend to impeach and
have impeached the honesty, virtue, and reputation of the said
Insular Life Insurance Company by exposing it to public hatred,
contempt, and ridicule that by the matters printed in said
circulars, and hereinbefore set forth in this information, the said
defendants West Coast Life Insurance Company, John Northcott,
and Manuel C. Grey meant and intended to state and represent to
those to whom the said defendants delivered said circulars as
aforesaid, that the said Insular Life Insurance Company was then
and there in a dangerous financial condition and on the point of
going into insolvency, to the detriment of the policy holders of the
said Insular Life Insurance Company, and of those with whom the
said Insular Life Insurance Company have and have had business
transactions, and each and all of said persons to whom the said
defendants delivered said circulars, and all persons as well who
read said circulars understood the said matters in said circulars
to have said libelous sense and meaning. Contrary to law."
On the 20th day of December, 1912, the plaintiff, together

with the other persons named as accused in said process,
through their attorneys, served upon the prosecuting
attorney and filed with the clerk of the court a motion to
quash said summons and the service thereof, on the ground
that the court had no jurisdiction over the said company,
there being no authority in the court for the issuance of the
proc
405
VOL. 27, MARCH 30, 1914.
405
ess, Exhibit B, the order under which it was issued being

void. The court denied the motion and directed plaintiff to
appear before it on the 28th day of December, 1912, and to
plead to the information, to which order the plaintiff then
and there duly excepted.
It is alleged in the complaint that "unless restrained by
this Court the respondent will proceed to carry out said
void order and compel your petitioner to appear before his
court and plead and submit to criminal prosecution without
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having acquired any jurisdiction whatever over your

petitioner."
The prayer of the complaint is, "your petitioner prays
judgment for the. issuance of a writ of prohibition against
the respondent, commanding the respondent absolutely to
desist or refrain from further proceedings against your
petitioner in the said criminal action."
The basis of the action is that the Court of First Instance
has no power or authority, under the laws of the Philippine
Islands, to proceed against a corporation, as such,
criminally, to bring it into court f or the purpose of making
it amenable to the criminal laws. It is contended that the
court had no jurisdiction to issue the process in evidence
against the plaintiff corporation that the issuance and
service thereof upon the plaintiff corporation were outside
of the authority and jurisdiction of the court, were
authorized by no law, conferred no jurisdiction over said
corporation, and that they were absolutely void and
without force or effect.
The plaintiff, further attacking said process, alleges that
the process is a mixture of civil and criminal process, that
it is not properly signed, that it does not direct or require
an arrest that it is an order to appear and answer on a
date certain without restraint of the person, and that it is
not in the form required by law.
Section 5 of General Orders, No. 58, defines an
information as "an accusation in writing charging a person
with a public offense." Section 6 provides that a complaint
or information is sufficient if it shows "the name of the
defendant, or if his name cannot be discovered, that he is
described
406
406

under a fictitious name with a statement that his true

name is unknown to the informant or official signing the
same. His true name may be inserted at any stage of the
proceedings instituted against him, whenever ascertained."
These provisions, as well as those which relate to
arraignment and counsel, and to demurrers and pleas,
indicate clearly that the maker of the Code of Criminal
Procedure had no intention or expectation that
corporations would be included among those who would fall
within the provisions thereof. The only process known to
the Code of Criminal Procedure, or which any court is by
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that order authorized to issue, is an order of arrest. The

Code of Criminal Procedure provides that "'if the
magistrate be satisfied from the investigation that the
crime complained of has been committed, and there is
reasonable ground to believe that the party charged has
committed it, he must issue an order for his arrest. If the
offense be bailable, and the defendant offer a sufficient
security, he shall be admitted to bail otherwise he shall be
committed to prison." There is no authority for the issuance
of any other process than an order of arrest. As a necessary
consequence, the process issued in the case before us is
without express authorization of statute.
The question remains as to whether or not the court
may, of itself and on its own motion, create not only a
process but a procedure by which the process may be made
effective.
We do not believe that the authority of the courts of the
Philippine Islands extends so far. While having the
inherent powers which usually go with courts of general
jurisdiction, we are of the opinion that, under the
circumstances of their creation, they have only such
authority in criminal matters as is expressly conferred
upon them by statute or which it is necessary to imply from
such authority in order to carry out fully and adequately
the express authority conferred. We do not feel that Courts
of First Instance have authority to create new procedure
and new processes in criminal law. The exercise of such
power verges too closely on legislation. Even though it be
admit
407
VOL. 27, MARCH 30, 1914.
407
ted, a question we do not now decide, that there are various

penal laws in the Philippine Islands which corporations as
such may violate, still we do not believe that the courts are
authorized to go to the extent of creating special procedure
and special processes for the purpose of carrying out those
penal statutes, when the legislature itself has neglected to
do so. To bring a corporation into court criminally requires
many additions to the present criminal procedure. While it
may be said to be the duty of courts to see to it that
criminals are punished, it is no less their duty to follow
prescribed forms of procedure and not to go out upon
unauthorized ways or act in an unauthorized manner.
There are many cases cited by counsel for the defendant
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which show that corporations have been proceeded against

criminally by indictment and otherwise and have been
punished as malefactors by the courts, Of this, of course,
there can be no doubt but it is clear that, in those cases,
the statute, by express words or by necessary intendment,
included corporations within the persons who could offend
against the criminal laws and the legislature, at the same
time established a procedure applicable to corporations. No
case has been cited to us where a corporation has been
proceeded against under a criminal statute where the court
did not exercise its common law powers or where there was
not in force a special procedure applicable to corporations.
The courts of the Philippine Islands are creatures of
statute and, as we have said, have only those powers
conferred upon them by statute and those which are
required to exercise that authority fully and adequately.
The courts here have no common law jurisdiction or
powers, If they have any powers not conferred by statute,
expressly or impliedly, they would naturally come from
Spanish and not f rom common law sources. It is
undoubted that, under the Spanish criminal law and
procedure, a corporation could not have been proceeded
against criminally, as such, if such an entity as a
corporation in fact existed under the
408
408

United States vs. Santiago.
Spanish law, and as such it could not have committed a

crime in which a willful purpose or a malicious intent was
required. Criminal actions would have been restricted or
limited, under that system, to the officials of such.
corporations and never would have been directed against
the corporation itself. This was the rule with relation to
associations or combinations of persons approaching, more
or less, the corporation as it is now understood, and it
would undoubtedly have been the rule with corporations.
From this source, then, the courts derive no authority to
bring corporations before them in criminal actions, nor to
issue processes for that purpose.
The case was submitted to this Court on an agreed
statement of facts with a stipulation for a decision upon the
merits. We are of the opinion that the plaintiff is entitled,
under that stipulation, to the remedy prayed for.
It is adjudged that the Court of First Instance of the city
of Manila be and it is hereby enjoined and prohibited from
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proceeding further in the criminal cause which is before us

in this proceeding, entitled United States vs. West Coast
Life Insurance Company, a corporation, John Northcott
and Manuel C. Grey, so far as said proceedings relate to
the said West Coast Life Insurance Company, a
corporation, the plaintiff in the case.
Arellano, C. J., and Araullo, J., concur.
Carson, J., concurs in the result.
Prohibition granted.
___________
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[No. 8527. March 30, 1914.]

ORIGINAL ACTION in the Supreme Court. Prohibition.

PHILIPPINE REPORTS ANNOTATED

attorney of the city of Manila filed an information in a

"THE UNITED STATES

The information upon which said process was issued is as

VOL. 27, MARCH 30, 1914.